PracticeConsultingICAEW abstainers land death blow

ICAEW abstainers land death blow

Perhaps the most striking feature of last week's rejection of electives by English ICA members was how few chartered accountants bothered to vote on the issue at all, writes Chirs Quick. Reactions from the anti- and pro-electives camps are printed below

The hair’s-breadth rejection of the carefully laid plans dealt a brutal blow both to Peter Wyman, the institute’s education chairman who had championed electives, and the reforming council leaders who had made clear their support for them.

But far more indicative of the challenges the institute is now facing was the sheer scale of apathy and indifference in the institute’s membership that the vote revealed.

Only just over 16,000 – around one in seven of its membership – voted. That was significantly less than the 21,491 who voted at the institute’s last attempt to introduce optional papers into its exam syllabus in 1996.

By their apathy, however unintentional, members may have unwittingly signed the institute’s death warrant.

If the Big Five and other leading firms follow up their recent posturing with action, and stop using the institute to train their graduate intake, as many have threatened, then the institute will gently decline into non-existence.

Wyman claims the prospect of large-scale defections to other institutes such as the Scots ICA and ACCA are unlikely, but many chartered firms are already training many of their staff through both of these bodies.

There are also other possibilities. Larger firms, for example, could team up to form a joint venture with a business school and develop their own accountancy qualification – a possibility already under discussion among Big Five partners.

The prospect of this development is particularly alarming for recently qualified members of the institute, as well as for those that are training at the moment. They could find later in their careers that they are competing for jobs with those holding what may come to be seen as a more modern qualification backed by a big name. By this time, if this scenario becomes reality, the ACA qualification could seem rather quaint and old-fashioned.

Had they realised all this was at stake, then maybe more members would have voted.

To the non-chartered accountant, and indeed to many members of the institute, the heat around the issue probably seems somewhat surreal.

The proposal to introduce optional papers as a smallish part of the institute’s lengthy exam process seems uncontroversial on the surface. Many may rightly ask what all the fuss is about – isn’t it all a lot of hot air about nothing?

But, as someone who has battled their way through the institute’s notoriously tough exams, I can understand the feelings of those who so virulently oppose electives.

The rigours of the exam process are a rite-of-passage for most accountants, and the fact that everyone covers exactly the same syllabus and suffers the same exam questions heightens this common bond. For this reason alone, the knee-jerk reaction of many institute members would have been to vote against electives.

On a less emotional level, there is also the fact that many graduates, myself included, entered their accountancy training contracts on the grounds they could not really decide what career they wanted to follow. Chartered accountancy seemed a good way of delaying this decision for a few years, while obtaining a respected professional qualification and a broad business training – and with the great boon of being self-financing.

Any move towards specialisation is bound to detract from the ‘generalness’ of the qualification. But, as Wyman and other advocates of electives have constantly underlined, the business world is now far more complicated than it was when many institute members undertook their training, and indeed more complex than most university graduates imagine.

Specialisation has therefore necessarily become a feature of most accountancy firms of all sizes – right down to the level of first-year trainee.

In this context, the institute’s move to introduce a degree of specialisation into about a fifth of its syllabus does not seem unreasonable. Indeed, it seems quite a mild measure – after all, trainee chartered accountants would still have had four-fifths of the syllabus in common.

But the biggest argument in favour of electives is that they are what those that pay for the training want.

There is a view among some members that the institute is something rather more than a trade association competing with other trade associations.

But that is the reality, and if the customers, those that pay to put their people through the institute’s training scheme, do not get what they want, then they will take their custom elsewhere. That is how the world works.

The Big Five provide 60% of the institute’s trainees, and the top 20 firms 80%.

It is ironic that those members who led the anti-electives campaign with such success themselves put very few trainees through the institute.

It is also ironic that, being that bit older and more established in their careers, they are unlikely to feel the potential consequences of their actions.

If the big firms pull out and take their custom elsewhere, it is the institute’s younger members who will suffer.


Despite the best endeavours of the institute and its education and training committee, the membership once again has kicked the subject of pre-qualification specialisation into touch. So what now? Hopefully all those with an interest in education and training can now work together on a way forward which will find favour with all training firms, whatever their size, and also deal with the issues identified in the institute’s Mori survey and consultation over the last five years.

One of those messages has been to ensure that the examination system tracks what students actually do in their place of work. With respect, that does not automatically mean what students do in the major training firms where sadly their practical experience can be very narrow. One of the strengths of our qualification has been the breadth of experience, both practical and educational, obtained during the training contract.

However, we should accept that in an ever more complex business environment, we all need greater business management skills to assist ourselves and, for those of us in practice, our clients. I therefore welcome the recognition of this previous shortcoming but it needs to be included with, not in place of, existing subjects.

Mori identified a need to try to reduce the costs of training. I would suggest that the only place where we can reduce costs while maintaining quality (another message from Mori) is in the land where the emperor buys his ‘clothes’ from travelling salesmen! What we can do, however, is try to make training more cost-effective.

What students bring to the profession, with their educational attainments, is an indication that they possess the necessary intellect to succeed in the office and in their exams. When they qualify, this is not the end of the road but the start of the rest of their career, augmented by lifelong learning. The academic experience of most of us, at the point of qualification, has since passed into oblivion but has been replaced by subsequently acquired technical skill and experience. When I qualified 25 years ago, most students had never seen a computer, let alone used one. However, I did know how to audit a bill book. The new initiative on diplomas should encourage post-qualification education and specialisation. The point of qualification should be the highest hurdle, but I would like to see fellowship linked to further assessment following post-qualification education, experience and specialisation.

For now, let us endeavour to work together in order to restore the pre-eminence of our qualification and ensure the future of our institute. Pre-qualification specialisation is dead: long live ACA.

Noel Kelleway is a partner with Richard Keen in Southend


Some positive aspects, as well as much disappointment, can be derived from last week’s vote at the English ICA agm to develop the ACA exam structure without electives.

The consultation process has been ongoing for three years, during which time an enormous amount of change has already been introduced with near universal support. These include:

*an ‘early hurdle’ to identify students who are unlikely to qualify early in the training period, thus eliminating wasted cost for the firms and allowing the students to change to a career where they will succeed; *the successful introduction of the ‘non-core’, allowing innovative forms of learning and assessment for parts of the qualification; *substantial reduction in the bureaucracy; *much greater ßexibility on the timing and pace of training, again significantly reducing costs; *agreement on a new ‘professional stage’, covering the concepts and principles which underpin the various aspects of accountancy; and *an increased emphasis on business, ensuring chartered accountants will be able to add value to their clients and employers in the future.

Now we need to agree on what should supplement the practical work experience, the professional stage, the advanced business management paper and the final admitting exam to complete the qualification. The consultation process proposed two electives to better align the exam syllabus with the student’s practical work experience, thus enabling the institute to examine and test the practical application as well as theoretical knowledge in greater depth.

The members’ rejection of this idea, by the smallest of margins, is a disappointment because it represented the solution preferred by the vast majority of those involved in training. For the time being, at least, this concept has to be off the agenda.

Nevertheless, the decision of the members will focus the minds of all those involved in developing and modernising the qualification. Over the next few weeks and months, there will be an intense effort by the education and training directorate to find a new way forward which will appeal to firms of all sizes and their students.

While the complexity of the task should not be underestimated, and the result is almost inevitably less good than one involving electives, there is every reason to believe that a successful outcome will be achieved.

Claims by other professional bodies that they will now be able to take the students from the English ICA are likely to prove unfounded.

Peter Wyman is a senior partner with PricewaterhouseCoopers and was, until recently, chairman of the English ICA education and training directorate

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